BRICS New Delhi Summit: A Step Forward?

Published on 10th April 2012

BRICS leaders Photo courtesy

More than a decade after Goldman Sachs coined the acronym, BRICS (Brazil, Russia, India, China and South Africa) leaders are meeting in New Delhi for the fourth summit. BRICS, described by some as a “wave of future” or as an “alternative to the unipolar world order” when it came into existence in 2006, is a grouping of regional leaders. However, at the moment the verdict on the future of BRICS grouping appears mixed.

It was in 2001 that the Goldman Sachs economist Jim O”Neill had evolved the concept of BRIC grouping, bringing together the four leading economic powers Brazil, Russia India and China. The emergence of BRIC was seen to represent the shift of economic power from developed countries to the developing world. However BRIC is more than an acronym now. BRIC emerged as a formal grouping in 2006, at the first meeting of the foreign ministers of Brazil, Russia, India and China on the sidelines of United Nations General assembly in New York. In 2010 during the Sanya summit in China, South Africa joined the grouping as a fifth member, bringing representation from the African continent.

The annual summits provide the leaders an opportunity to exchange perspectives on various crucial issues. Though the earlier summits held at Yaketrinburg and Brasilia focussed mainly on economic issues, the leaders deliberated on political issues such as the emerging crisis the Arab world during last years Sanya summit. In 2011 all the BRIC members were together at the United Nations Security Council, with the new non- permanent members changing the composition of the institution. This year Brazil’s membership has come to an end however they are still together with other emerging powers as BASIC in the climate change negotiations.

This brings us to the agenda for the current summit. The theme for the New Delhi summit is “BRICS Partnership for Global Stability, Security and Prosperity.” The leaders are expected to deliberate on a wide ranging agenda that includes issues such as sustainable development, food and energy security, health, poverty eradication and global governance. There is also talk of the summit taking steps towards institutionalising BRICS with the formation of a BRICS investment bank that may emerge as an alternative to the IMF. At the same time, the leaders will also thrash out a mutually agreed Action Plan on areas of common interest. Two agreements may be signed before the end of the summit. They are on extending facilities in local currencies and BRICS multilateral letter of credit confirmation.

There is no doubt that the BRICS grouping has evolved over the years as a serious platform of consultation and cooperation on various issues of economic and political importance. In the wake of the recent Eurozone crisis, the emerging economic importance of BRICS is undeniable. Latest estimates suggest that BRICS countries excluding South Africa collectively account for around 25 percent of world GDP and this will increase to 40 percent by 2030. According to Goldman Sachs, their combined economies are expected to surpass G 7 by 2035. Moreover all five of these countries together account for quarter of the world’s land and little less than half of the world’s population. The intra - BRICS trade today stands at $230 billion. Thus it appears BRICS is emerging as a “new growth pole in the multipolar world order.” The member states share perspectives of shaping an alternate economic order. They also share there desire to “to find sustainable solutions to contemporary issues and challenges facing the world.”

India sees great value in engaging new coalitions or clubs like the BRICS. The BRICS coalition does provide an opportunity for each member to play an important role at the global stage. It also presents them the platform to wield greater influence in reshaping the rules governing the existing international economic order.

One of the challenges that BRICS face is cohesiveness. Despite their joint presence at UNSC in 2011, the BRICS countries were unable to coordinate their positions on ongoing crisis whether in the case of Libya or Syria. In Libya, while South Africa voted in favour of resolution 1973 that approved a “No fly zone” and NATO air strikes, the rest of the BRICS countries abstained. In the case of Syria, in the latest resolution backing Arab League plan for President’s Assad’s removal, India, Brazil and South Africa voted in favour while China and Russia vetoed it. They also face the challenge of coordinating positions on sanctions against Iran. That do these developments imply? Does this mean that BRICS is not really a cohesive group? The UNSC experience shows that while possibilities of synchronising positions do exist, the fact remains that BRICS is a heterogeneous group - that includes democracies and autocracies, energy importers and producers. Moreover national interests and geopolitical factors may limit the possibility reaching a collective viewpoint.

In conclusion, while their growing economic clout has brought Brazil, Russia, India, China and South Africa together at New Delhi, it remains to be seen whether they can translate the joint statements issued at the end of the summit with collective action.